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State-share reform enters final phase

(Xinhua)
Updated: 2006-07-04 09:41

The reform has been viewed by the regulator and investors as vital for the capital market to function as an open and fair market for both majority and minority public shareholders.

After four years of bearish activity, the Chinese stock market rebounded by nearly 70 percent with improved investor confidence over the the past 12 months, when the major index slumped to an eight year-low  thanks to the sweeping share reform and other institutional changes.

The composite stock index on the Shanghai Stock Exchange, closed at 1,697 points on Monday from 998 points in June last year, an eight-year low.

In addition, China also revised its Securities Law and Corporate Law to better regulate listed firms, and allowed more institutional investors from home and abroad to invest on the country's stock markets.

Cao Bing, president of Datang Telecom Technology Co., said the reform had enabled both majority and minority stockholders to have a shared interest in improving corporate governance.

The majority stockholder of Datang, which is listed on the Shanghai exchange and completed its share reform earlier this year, was as interested as the minority stockholders in the price fluctuations of their shares in sharp contrast to the past, said the president.

Chinese majority stockholders used to pay little attention to the price fluctuations as their shares were not tradable.